For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Oncobiologics Inc’s (NASDAQ:ONS) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. Check out our latest analysis for Oncobiologics
How Well Did ONS Perform?
I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine many different companies on a similar basis, using new information. For Oncobiologics, its most recent earnings (trailing twelve month) is -US$38.65M, which, relative to last year’s level, has become less negative. Since these figures may be fairly myopic, I’ve calculated an annualized five-year value for ONS’s earnings, which stands at -US$52.59M. This suggests that, while net income is negative, it has become less negative over the years.
We can further examine Oncobiologics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Oncobiologics has seen an annual decline in revenue of -41.02%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the US biotechs industry has been growing its average earnings by double-digit 13.27% in the past year, and 19.44% over the previous five years. This shows that, despite the fact that Oncobiologics is currently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Though Oncobiologics’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues Oncobiologics may be facing and whether management guidance has dependably been met in the past. You should continue to research Oncobiologics to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is ONS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.